Companies Act 2014 section 463

Mergers to which Chapter applies — definitions and supplementary provision

Section 463 defines the three types of company merger covered by this Chapter — merger by acquisition, merger by absorption, and merger by formation of a new company — and sets out the circumstances in which a company being wound up may still participate in a merger.

• A merger by acquisition occurs when one company acquires all the assets and liabilities of one or more other companies, which are dissolved without liquidation, in exchange for shares (with or without cash) issued to the members of the acquired companies.
• A merger by absorption occurs when one or more companies transfer all their assets and liabilities to a parent company that already holds all their shares, and the transferring companies are dissolved without liquidation.
• A merger by formation of a new company occurs when one or more companies transfer all their assets and liabilities to a newly formed company, receiving shares (with or without cash) in the new company, and the transferring companies are dissolved without liquidation.
• A company that is being wound up may still participate in any of these three types of merger, provided that the distribution of its assets to shareholders has not yet begun at the date of the common draft terms of merger.